Taxes for Canadian?

[K.Bryce]

Hi, just wondering if anyone in Canada can give me some advice. I'm in Canada and am wondering if or how the tax forms apply to me? Canada is listed as a country that has tax treaties with the U.S... and under the image section it is a 0% for tax withhold on Sale of Images, however I keep reading that if I don't fill out a tax form that Adobe will withhold 30% of the income as taxes... so confused right now. Can anyone explain? thank you

[Test Screen Name]

I believe it is the form which is the only legal way for you to tell Adobe that you are subject to the Canadian tax system and treaties. Being located in Canada on the day you registered, or having a Canadian address or credit card, isn't legal proof of tax status.

[K.Bryce]

Ah, ok that makes sense. Thank you!

[Abambo · Accepted solution]

I'm not from Canada, but still, the link here https://helpx.adobe.com/stock/contributor/help/Taxes-non-US-citizens.html provides all information you need. It helped me as a non US citizen. You probably need to fill out form W-8 BEN.

It's basically a declaration, so that Adobe can justify not to withhold the 30% taxes, but the amount foreseen for your country (0%).

But as we all need to pay our taxes: you will have to declare your revenue in Canada. But that's a different story.

[K.Bryce]

Ok. Yes i expect there would be taxes on the Canadian side but was confused on what the American side of taxes had to do with me. Thank you! This makes sense now, lol 

[Robert McAlpine]

I am not an accountant and my understanding of the tax situation is as a layman who is a Canadian business owner with a Canadian BN.  As a resident of Canada, you are responsible for keeping track of sales in other countries and including them in your income when you calculate your Canadian Income Tax.  If you have a BN, you do not charge HST/ GST on sales outside Canada; but again, if you are audited for HST/GST (as I was) the auditor will expect you to show them record of your outside the countrty sales; but they will not expect you to have charged HST/GST on these sales. 

You are not liable to pay US taxes on sales in the USA, nor to file US income tax (that is where the treaty between Canada and the USA comes in - you have included these sales in your calculation of your Canadian Income Taxes). 

As I understand it, Adobe is expected to withold a percentage of sales from US residents and these withholdings are deducted from the Income tax American residents pay on their sales through Adobe.  The forms we Canadian are asked to sign by Adobe are to allow Adobe to exempt us from having a percentage of our sales withheld against US Income taxes.  But we Canadians still have to include these sales in our calculation of our Canadian Income tax. 

That is a bit complicated; but it is my layman's understanding of Canadian and US tax laws.     

[Abambo]

Looks like quite the same situation in every country. 🙂

[K.Bryce]

Thank you very much for the explanation!

[tracyy9598]

May I ask how exactly did you fill out line 10? ___of the treaty identified on line 9 above to claim ___% rate of withholding on _______?

[Abambo]

Check here: https://helpx.adobe.com/stock/contributor/help/Contributor-tax-FAQ.html

And here: https://helpx.adobe.com/stock/contributor/help/withholding-rates-country.html?cq_ck=1503513388328

[tracyy9598]

Thank you so much for the guidance, just to confirm, If i'm selling images from Canada, that will be:..... 12(a) of the treaty identified on line 9 above to claim 0% rate of withholding on Image and others?

[Abambo]

I'm not selling from Canada, and I trust you, that you can read a small table. Adobe compiled all the data so that you have it as simple as possible to fill out this form.

[tracyy9598]

I'm sure the numbers I filled are correct, I just wasn't sure what it is asking to fill on the first field, adobe's form is not allowing me to copy and translate. thanks anyway.

[Abambo]

It's not Adobe's form, it's the IRS form tweaked by Adobe for this use. If Adobe accepts the form, you did fill in the correct data. If you need additional information, a tax consultant may be the more appropriate way to ask your questions, as you do not know the qualifications of any user here answering your questions. They may be correct, they may be utterly wrong. At the end of the day, they are your taxes.

[Nancy OShea]

Right.  You MUST submit IRS tax withholding forms to Stock in order to get paid. It's not optional. 

As a non-U.S. citizen and because Canada & U.S. have trade agreements, you pay 0% withholding.  If Canada & U.S. had no trade agreements, the flat tax rate would be 30% but that doesn't effect you.  Pretty simple stuff, really.  Just fill out the form for non-US resident and submit it from your Contributor portal.

If you have questions about your local tax responsibilities, talk to your accountant or tax expert.

Hope that helps.